ZACHARY SILBERSHER V. ALLERGAN, INC., No. 21-15420 (9th Cir. 2022)
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Relator alleged that Defendants prevented generic drug competitors from entering the market. Relator alleged that this permitted defendants to charge Medicare inflated prices for the two drugs, in violation of the False Claims Act. The district court denied Defendants’ motion to dismiss based on the False Claims Act’s public disclosure bar, which prevents a relator from merely repackaging publicly disclosed information for personal profit by asserting a claim under the Act.
The Ninth Circuit held that an ex parte patent prosecution is an “other 4 UNITED STATES EX REL. SILBERSHER V. ALLERGAN Federal . . . hearing” under 31 U.S.C. Sec. 3730(e)(4)(A)(ii). Thus, the public disclosure bar was triggered. The Ninth Circuit expressed no opinion on whether Relator still could bring his qui tam action because he was an “original source” of the information in his complaint. The court remanded to the district court for further proceedings.
Court Description: False Claims Act. The panel reversed the district court’s order denying defendants’ motion to dismiss a qui tam action under the False Claims Act and remanded for further proceedings. Relator alleged that, by virtue of fraudulently-obtained patents on two Alzheimer’s disease drugs, defendants prevented generic drug competitors from entering the market. Relator alleged that this permitted defendants to charge Medicare inflated prices for the two drugs, in violation of the False Claims Act. The district court denied defendants’ motion to dismiss based on the False Claims Act’s public disclosure bar, which prevents a relator from merely repackaging publicly disclosed information for personal profit by asserting a claim under the Act. Addressing the public disclosure bar, as revised in 2010, the panel reaffirmed the elements of the test for triggering the bar: (1) the disclosure at issue occurred through one of the channels specified in the statute; (2) the disclosure was public; and (3) the relator’s action is substantially the same as the allegation or transaction publicly disclosed. Only the first element was at issue. The statute states that the public disclosure bar applies if “substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed . . . in . . . [an] other Federal . . . hearing.” The panel held that an ex parte patent prosecution is an “other 4 UNITED STATES EX REL. SILBERSHER V. ALLERGAN Federal . . . hearing” under 31 U.S.C. § 3730(e)(4)(A)(ii); accordingly, the public disclosure bar was triggered. The panel expressed no view on whether relator still could bring his qui tam action because he was an “original source” of the information in his complaint. The panel remanded to the district court for further proceedings.
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